2015 (9) TMI 205 - HC - Central Excise

Penalty imposed under proviso 3 (ii) of Rule 96ZO (3) of the Central Excise Rules, 1944 - Held that - As per the dictum of the Apex Court in the case of Kolhapur Canesugar Works Ltd. (2000 (2) TMI 823 - Supreme Court of India), the normal effect of repealing a statute or deleting a provision would mean as if same statute has never been passed and such repealed or omitted statute shall be considered as a law which never existed and the effect and omission of repealing of such statute without saving clause in favour of the pending procedure, all action must stop where the omission finds them and if final relief has not been granted, shall not be granted, however, savings of the nature contained in Section 6 of General Clause Act or Special Act may modify the position. Therefore, operation of repeal or deletion as to the future and the past largely depends on the savings applicable. - by way of Section 111 of the Finance (No.2) Act, 2009, any action done or purported to be done pursuant to the notification dated 1st August, 1997, i.e. enactment of Rule 96ZO of the Central Excise Rules, 1944 were saved and held to be valid. Therefore, imposition of penalty against the petitioner by the order dated 06.08.2002 as confirmed / upheld by the Apex Court is valid and does not require any interference. - Decided against assessee.

Summary

Issues:
Challenge to penalty imposition under Central Excise Rules, 1944 and subsequent legal proceedings.

Analysis:
The petitioner challenged the penalty imposed under proviso 3 (ii) of Rule 96ZO (3) of the Central Excise Rules, 1944, amounting to Rs. 17,50,484, through a writ petition. The petitioner, a manufacturer of M.S. Ingots, did not pay excise duty for specific periods leading to the penalty imposition. The Commissioner (Appeals) later reduced the penalty to Rs. 75,000. Subsequent appeals by the Revenue were dismissed by various authorities, including the High Court and the Apex Court. The petitioner then approached the Apex Court again, but the appeal was also dismissed. The issue arose whether the writ petition challenging the penalty imposition was maintainable post the Apex Court's order. The court held that the petition was not maintainable due to the principle of res judicata.

Furthermore, the court examined the legal implications of the omission of Section 3A of the Central Excise Act, 1944, and Rule 96ZO of the Rules. Section 111 of the Finance (No.2) Act, 2009, validated actions taken under notifications issued earlier. The court referred to the case law of Kolhapur Canesugar Works Ltd., emphasizing that the repeal or deletion of a statute without a saving clause implies as if the statute never existed. In this case, actions taken under Rule 96ZO were saved by Section 111 of the Finance Act, making the penalty imposition valid and not subject to interference.

In conclusion, the court dismissed the writ petition, upholding the penalty imposition as confirmed by the Apex Court. The judgment highlighted the legal validity of the penalty imposition under the Central Excise Rules, 1944, and the impact of statutory amendments on past actions. The court's decision was based on the principle of res judicata and the saving provisions of the Finance Act, 2009.